Stocks extend rally with fresh highs

Index shoots up 728 points on robust corporate results, institutional buying

KARACHI:

Pakistan Stock Exchange (PSX) continued its bullish run on Wednesday in line with the previous two sessions as the KSE-100 index shot up over 700 points and closed above 87,000, marking a new all-time high.

The session saw sustained positive momentum, driven by strong institutional buying of cement and banking stocks as well as investor optimism surrounding the upcoming economic data.

The index touched the intra-day high of 87,309.23 before closing near its peak. The rally followed impressive corporate earnings announcements amid a surge in trading volumes.

"Stocks closed at a new all-time high as investors weighed International Monetary Fund's (IMF) higher growth projection at 3.2% and inflation estimate at 9.5% for FY2025, and the finance minister's affirmation of ongoing talks on China debt re-profiling," said Ahsan Mehanti, Managing Director of Arif Habib Corp.

Record corporate earnings announced for banking and fertiliser sectors and the current account surplus for September 2024 also played the role of catalysts in record close at the PSX, he added.

At the close of trading, the benchmark KSE-100 index recorded a surge of 727.96 points, or 0.84%, and settled at 87,194.54. Topline Securities, in its report, commented that trading session at the PSX showed positive momentum, driven by expectations of rate cut in the monetary policy announcement set for November 4, 2024.

"Investor enthusiasm for K-Electric surged following recent announcement that the National Electric Power Regulatory Authority (Nepra) has approved a generation tariff for all its power plants effective after June 2023," it said.

Key contributors to the KSE-100 index were Fauji Fertiliser Co, Habib Bank Limited, Kohat Cement, Bank AL Habib and Cherat Cement, which together added 485 points, Topline added.

Arif Habib Limited (AHL), in its report, mentioned that the 87,000-point milestone was unlocked for the KSE-100, driven by strong gains in cement stocks. Biggest contributors to the index were Fauji Fertiliser Co, up 5.51%, Habib Bank, up 2.56%, and Kohat Cement, up 10%, it said.

United Bank Limited posted a 0.39% gain and reported 3QCY24 earnings per share (EPS) of Rs15.3, reflecting a 27% year-on-year (YoY) growth and 26% quarter-on-quarter (QoQ) increase. The bank also announced dividend per share (DPS) of Rs11.

MCB Bank posted 3QCY24 EPS of Rs15.3, showing an 8% YoY decline but an 8% QoQ increase, with DPS of Rs9. For 9MCY24, MCB's EPS stood at Rs44.48 with DPS of Rs27. AHL added that K-Electric saw a significant gain of 10.4% after Nepra approved a generation tariff for the company's power plants.

According to JS Global analyst Mohammed Waqar Iqbal, the key political driver for the PSX's surge to new peak was the parliamentary committee's approval of Justice Yahya Afridi as the new chief justice, bringing an end to weeks of speculation. "We expect the current upward trend to persist, with the upcoming monetary policy meeting on November 4 likely serving as the next catalyst, as the SBP may cut rate by an additional 150-200 basis points," he said.

Overall trading volumes decreased to 699.3 million shares compared with Tuesday's tally of 722.2 million. The value of shares traded during the day was Rs26.8 billion.

Shares of 447 companies were traded. Of these, 214 stocks closed higher, 173 fell and 60 remained unchanged.

K-Electric was the volume leader with trading in 207.6 million shares, gaining Rs0.44 to close at Rs4.67. It was followed by WorldCall Telecom with 42.9 million shares, gaining Rs0.04 to close at Rs1.29 and Pakistan International Bulk Terminal with 33.97 million shares, losing Rs0.78 to close at Rs5.96. During the day, foreign investors sold shares worth Rs366.6 million, according to the NCCPL.